contango
/kənˈtæŋɡoʊ̯/
Word Rarity
Very rare
Frequency: Zipf frequency 1.63 in modern English
11
Scrabble Score
8
Letters
3
Syllables
6
Unique Chars
Meaning
noun
The situation in a futures market where prices for future delivery are higher than prices for immediate (or nearer) delivery, indicating the expectation that the price of the underlying asset will go up.
Countable; Uncountable
noun
The amount by which prices for future delivery are higher than prices for near delivery.
Countable; Uncountable
noun
Fee paid by a buyer to the seller on settlement day when the buyer wishes to defer settlement until the next settlement day.
Countable; Obsolete; Uncountable
Example Sentences
- "most of these other commodities are generally in contango"
- "Normally new buyers would go after the March silver contract, especially with such a small contango."
- "Yesterday was Settling Day in Consols, and Monday next the Settling of Omnium. Owing to the great scarcity of money, the Contango on both is extremely great, nearly equal to 15 per cent. for money, from account to account."
Etymology
The term originated in early-19th-century England, and is believed to be a corruption of continuation, continue or contingent. In the past on the London Stock Exchange, contango was a fee paid by a buyer to a seller when the buyer wished to defer settlement of the trade they had agreed. The charge was based on the interest forgone by the seller not being paid.
Usage
Subject
Wiktionary places this term in Finance.